Correlation Between Kinaxis and Premium Brands
Can any of the company-specific risk be diversified away by investing in both Kinaxis and Premium Brands at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Kinaxis and Premium Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kinaxis and Premium Brands Holdings, you can compare the effects of market volatilities on Kinaxis and Premium Brands and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Kinaxis with a short position of Premium Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinaxis and Premium Brands.
Diversification Opportunities for Kinaxis and Premium Brands
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kinaxis and Premium is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Kinaxis and Premium Brands Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Premium Brands Holdings and Kinaxis is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Kinaxis are associated (or correlated) with Premium Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Premium Brands Holdings has no effect on the direction of Kinaxis i.e., Kinaxis and Premium Brands go up and down completely randomly.
Pair Corralation between Kinaxis and Premium Brands
Assuming the 90 days trading horizon Kinaxis is expected to generate 1.63 times more return on investment than Premium Brands. However, Kinaxis is 1.63 times more volatile than Premium Brands Holdings. It trades about 0.03 of its potential returns per unit of risk. Premium Brands Holdings is currently generating about 0.01 per unit of risk. If you would invest 14,842 in Kinaxis on August 30, 2024 and sell it today you would earn a total of 3,101 from holding Kinaxis or generate 20.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinaxis vs. Premium Brands Holdings
Performance |
| Timeline |
| Kinaxis |
| Premium Brands Holdings |
Kinaxis and Premium Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinaxis and Premium Brands
The main advantage of trading using opposite Kinaxis and Premium Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinaxis position performs unexpectedly, Premium Brands can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Premium Brands will offset losses from the drop in Premium Brands' long position.| Kinaxis vs. Open Text Corp | Kinaxis vs. Enghouse Systems | Kinaxis vs. Docebo Inc | Kinaxis vs. Descartes Systems Group |
| Premium Brands vs. CCL Industries | Premium Brands vs. North West | Premium Brands vs. Maple Leaf Foods | Premium Brands vs. FirstService Corp |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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